I've stayed in everything from a tent cabin up through a 10-bedroom house rental. It depends primarily on how large the group is.

Most of the time I'm traveling either alone or with my wife. A standard hotel room is sufficient space. So that's one reason why I haven't gone the VRBO/AirBnB route: I don't need more space. If I had a larger family and routinely needed 2+ bedrooms, a kitchen for keeping down food costs, etc. then I'd look at renting an apartment much more often.

About once a year I travel with a larger group-- a family reunion or a gathering of friends-- and we rent a house. It a) costs less than the requisite number of hotel rooms and b) enables more socialization as we have living rooms, dining rooms, kitchens, etc. exclusive to our group.

Up until recently our groups have always rented a vacation property through a reputable local property management company. This is largely to minimize risks around "Who do you call if something goes wrong?" as mentioned by a few people upthread. Even so, my family/friends and I have had a few bad rentals, where property management companies played shell games like "Oh, we can't find a repairman to come out on a holiday weekend," and, "We need the owner's okay for that, but they've been overseas and haven't answered their phone all week." Again, those were with companies that had a physical presence in town. I worry what it would have been like with a virtual agency that styles itself as merely a matchmaker between owner and tenant.

Despite that concern, though, we did recently plan group trips using AirBnB and VRBO (one each) for the first time. We'll see how those go.